Logan Reid
Disproportionate Share Hospitals (DSH) are healthcare facilities that serve a large number of Medicaid and uninsured patients. These hospitals receive financial support from the United States government through the DSH program, which aims to compensate hospitals treating low-income patients. To be eligible for the program, hospitals must meet specific criteria, including being classified as a private nonprofit hospital under contract with the state or local government to provide healthcare services to low-income individuals. The value of a hospital's DSH index, calculated using the number of Medicare and Medicaid patient days, determines its eligibility for a DSH payment and the payment size. States are required to submit annual reports detailing DSH payments made to each hospital, and the program has experienced significant growth and funding changes over the years.
| Characteristics | Values |
|---|---|
| Definition | Hospitals that treat a disproportionate number of low-income patients and receive payments from the Centers for Medicare & Medicaid Services to cover the costs of providing care to uninsured patients. |
| Funding | The United States government provides funding to Disproportionate Share Hospitals (DSH) through the DSH programs, allowing facilities to receive at least partial compensation. |
| Eligibility | Hospitals must be classified as either a private nonprofit hospital under contract with state or local government to provide health services to low-income individuals, owned or operated by a unit of state or local government, or a public or private nonprofit corporation that is formally granted governmental powers by a unit of state or local government. |
| Payment Adjustments | The value of a hospital's DSH "index" determines its eligibility for a DSH payment and the size of the payment. The index is calculated as the sum of two ratios: the proportion of all Medicare days attributable to beneficiaries of Supplemental Security Income, and the proportion of all patient days for which Medicaid is the primary payer. |
| Medicare DSH Adjustment | The Medicare DSH adjustment provision was enacted by section 9105 of the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 and became effective for discharges on or after May 1, 1986. There are two methods for a hospital to qualify for the adjustment. |
| Reporting Requirements | Federal law requires states to submit an independent certified audit and an annual report to the Secretary, identifying each Disproportionate Share Hospital that received a DSH payment adjustment and providing any additional information necessary to ensure the appropriateness of the payment amount. |
| Allotment Reductions | CMS has proposed a methodology to implement annual reductions to state Medicaid DSH allotments for fiscal years 2018 through 2025, taking into account factors such as the uninsured factor and Medicaid volume factor. |
| Statutory Requirements | Medicaid DSH payments are statutorily required payments intended to offset hospitals' uncompensated care costs, improve access for Medicaid and uninsured patients, and enhance the financial stability of safety-net hospitals. |
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Hospitals serving a large number of Medicaid and uninsured individuals
Disproportionate Share Hospitals (DSH) are healthcare facilities that serve a large number of Medicaid and uninsured individuals. These hospitals receive financial support from the United States government through the DSH programs, which provide at least partial compensation for treating low-income patients. The goal of this funding is to improve access for Medicaid and uninsured patients and enhance the financial stability of safety-net hospitals.
To be eligible for DSH payments, hospitals must meet specific criteria. They should primarily serve a disproportionate number of low-income patients who are not eligible for Medicare or Medicaid. Additionally, they must fall into one of the following categories: be a private nonprofit hospital under contract with state or local government to provide healthcare services to the aforementioned low-income group; be owned or operated by a unit of state or local government; or be a public or private nonprofit corporation that is formally granted governmental powers by a unit of state or local government. Furthermore, eligible hospitals must have a disproportionate share adjustment percentage greater than 11.75% for their most recently filed cost report.
The value of a hospital's DSH "index" is a critical factor in determining its eligibility for DSH payments and the amount it receives. This index is calculated using two ratios: the proportion of all Medicare days attributable to beneficiaries of Supplemental Security Income (SSI), and the proportion of all patient days for which Medicaid is the primary payer. Hospitals with a higher DSH index are more likely to receive DSH funds.
The process of identifying and reimbursing DSH hospitals involves several steps. States are required to submit an independent certified audit and an annual report to the Secretary, detailing DSH payments made to each hospital. This report helps ensure the appropriateness of payment amounts and includes specific verifications for all DSH payments. The Centers for Medicare & Medicaid Services (CMS) have also developed additional resources, such as the General DSH Audit and Reporting Protocol, to assist states in meeting statutory and regulatory requirements.
DSH payments are subject to adjustments and reductions. For instance, the Medicare DSH adjustment provision under section 1886(d) (5) (F) of the Act provides two methods for hospitals to qualify for the Medicare DSH adjustment, primarily based on a statutory formula resulting in the DSH patient percentage. Additionally, CMS has issued rulings that affect the calculation of DSH payments, such as including hospital patient days for Medicare beneficiaries for which Medicare does not pay in the SSI ratios of the disproportionate patient percentage.
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Hospitals with a disproportionate share adjustment percentage of >11.75%
Disproportionate Share Hospitals (DSH) are defined in Section 1886(d)(1)(B) of the Social Security Act. They primarily serve low-income patients and receive payments from the Centers for Medicare and Medicaid Services to cover the costs of providing care to uninsured patients. To be eligible to participate in the 340B Drug Pricing Program, DSHs must meet specific requirements, including having a disproportionate share adjustment percentage greater than 11.75% in their most recently filed cost report.
The disproportionate share adjustment percentage is calculated using the alternate special exemption methodology for large urban hospitals with over 100 beds. This calculation considers the percentage of total net inpatient care revenues derived from state and local governments for indigent care, excluding Medicare or Medicaid. Hospitals with a primary DSH patient percentage exceeding 15% and an alternate special exemption exceeding 30% are eligible for the maximum DSH payment adjustment.
Federal law mandates that state Medicaid programs provide DSH payments to qualifying hospitals serving a large number of Medicaid and uninsured individuals. These payments are subject to annual DSH allotment limits for each state, restricting Federal Financial Participation (FFP) in total statewide DSH payments. Additionally, FFP for DSH payments is limited by the hospital-specific DSH limit, which is the cost of providing inpatient and outpatient services to Medicaid patients and the uninsured, net of payments received on their behalf.
To identify hospitals with a disproportionate share adjustment percentage of >11.75%, one can refer to the cost reports filed by hospitals claiming a DSH payment adjustment. These reports should include detailed listings of Medicaid-eligible days corresponding to the claimed Medicaid-eligible days in the cost report. Amended cost reports necessitate updated listings of Medicare-eligible days to ensure alignment with any changes in Medicaid-eligible days.
Furthermore, states receiving FFP for DSH payments are required to submit annual independent certified audits and reports to the Secretary, describing DSH payments made to each DSH hospital. These reports help ensure the appropriateness of payment amounts and include specific verifications for all DSH payments. The Centers for Medicare and Medicaid Services (CMS) have also developed additional guidance, such as the General DSH Audit and Reporting Protocol, to assist states in meeting statutory and regulatory requirements.
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Hospitals that receive federal DSH funds
To be eligible for federal DSH funds, hospitals must meet specific criteria. They must be classified as one of the following:
- A private nonprofit hospital under contract with state or local government to provide healthcare services to low-income individuals who are not eligible for Medicare or Medicaid.
- Owned or operated by a unit of state or local government.
- A public or private nonprofit corporation that is formally granted governmental powers by a unit of state or local government.
Additionally, DSH hospitals must have a disproportionate share adjustment percentage greater than 11.75% for the most recently filed cost report. This percentage is calculated based on the number of inpatient care bed days attributable to units or wards generally payable under the Inpatient Prospective Payment System, excluding beds used for outpatient observation or other ancillary services.
The amount of federal DSH funding a hospital receives is determined by its DSH "index," which is the sum of two ratios: the proportion of all Medicare days attributable to beneficiaries of Supplemental Security Income, and the proportion of all patient days for which Medicaid is the primary payer. Hospitals with a higher DSH index will receive larger DSH payments.
The distribution of federal DSH funds varies across geographic areas. For example, the Middle Atlantic, South Atlantic, and Pacific regions receive a disproportionately large share of DSH payments compared to the number of Medicare discharges in those regions.
Federal DSH payments have experienced significant growth over the years. Between 1990 and 1996, annual federal DSH payments increased from $1.4 billion to more than $15 billion. In fiscal year 2021, Medicaid made a total of $18.9 billion in DSH payments, including $10.8 billion in federal funds.
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Hospitals that serve low-income patients
Disproportionate Share Hospitals (DSH) are hospitals that serve low-income patients. These hospitals receive payments from the Centers for Medicare & Medicaid Services to cover the costs of providing care to uninsured patients. To be eligible for the 340B Drug Pricing Program, Disproportionate Share Hospitals must meet specific requirements. They must be classified as either a private nonprofit hospital under contract with state or local government to provide healthcare services to low-income individuals who are not eligible for Medicare or Medicaid, owned or operated by a unit of state or local government, or a public or private nonprofit corporation that is formally granted governmental powers by a unit of state or local government.
Medicaid DSH payments are statutorily required payments intended to offset hospitals' uncompensated care costs and improve access for Medicaid and uninsured patients. These payments are made to qualifying hospitals that serve a large number of Medicaid and uninsured individuals. The value of a hospital's DSH "index" determines its eligibility for a DSH payment and the size of the payment. The index is the sum of two ratios: the proportion of all Medicare days attributable to beneficiaries of Supplemental Security Income and the proportion of all patient days for which Medicaid is the primary payer.
The Medicare DSH adjustment provision was enacted by section 9105 of the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 and became effective for discharges occurring on or after May 1, 1986. There are two methods for a hospital to qualify for the Medicare DSH adjustment, with the primary method being based on a statutory formula that results in the DSH patient percentage.
The United States government provides funding to hospitals that treat indigent patients through the Disproportionate Share Hospital (DSH) programs, allowing facilities to receive at least partial compensation. However, Medicare DSH payments are highly concentrated, with 93% going to large hospitals in urban areas and 65% to teaching hospitals.
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Hospitals with >100 beds in urban areas
Disproportionate Share Hospitals (DSH) are defined as hospitals that serve a large number of Medicaid and uninsured patients. They receive payments from the Centers for Medicare & Medicaid Services to cover the costs of providing care to these patients. To be eligible for the 340B Drug Pricing Program, DSH hospitals must meet specific requirements, such as being classified as a private nonprofit hospital under contract with state or local government to serve low-income individuals.
When identifying DSH hospitals with more than 100 beds in urban areas, it is essential to consider factors such as ownership, patient demographics, and bed capacity. These hospitals are often located in densely populated areas and serve a diverse range of patients, including those with Medicaid or without insurance.
To identify specific hospitals, you can refer to resources such as the American Hospital Association (AHA), which provides annual surveys and statistics on hospitals in the United States. Their data includes information on the number of hospitals in each state, government hospitals, and the number of hospital beds. Additionally, the AHA website offers an interactive map where you can click on individual hospitals to view the number of staffed beds.
Another source of information is the official websites of the respective states or urban areas of interest. State government websites often provide detailed information about healthcare facilities within their jurisdiction, including bed capacities and patient demographics. Additionally, states are required by federal law to submit annual reports and independent certified audits describing DSH payments made to each qualifying hospital. These reports can provide valuable insights into identifying DSH hospitals with more than 100 beds in urban areas.
While the focus is on hospitals with more than 100 beds, it is worth noting that community hospitals, which are nonfederal, short-term general, or specialty hospitals, may also fall into this category. These hospitals include academic medical centers and teaching hospitals accessible to the general public. By combining data from sources like the AHA and state government websites, you can identify DSH hospitals with over 100 beds in urban areas and gain insights into their operations and patient demographics.
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Frequently asked questions
Disproportionate share hospitals (DSH) are hospitals that serve a large number of Medicaid and uninsured individuals.
Disproportionate share hospitals receive payments from the Centers for Medicare & Medicaid Services to cover the costs of providing care to uninsured patients.
The United States government provides funding to hospitals that treat indigent patients through the Disproportionate Share Hospital (DSH) programs.
Hospitals qualify for disproportionate share payments based on a statutory formula that results in the DSH patient percentage. The value of the hospital's DSH "index" determines the hospital's eligibility for a DSH payment and the size of the payment.
Disproportionate share hospital (DSH) payments are intended to offset hospitals’ uncompensated care costs to improve access for Medicaid and uninsured patients and enhance the financial stability of safety-net hospitals.
